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submitted prior to the planning application being validated. The viability
assessment will be scrutinised by the District Council.

4 Approach to viability assessment

4.1 Overview

It is important to understand how viability is assessed in the planning and
development process. The assessment of viability is usually referred to a
residual development appraisal approach. Our understanding is illustrated
in the diagram below. This shows that the starting point for negotiations is
the gross residual site value which is the difference between the scheme
revenue and scheme costs, including a reasonable allowance for developer
return.

Once CIL or Section 106 contributions have been deducted from the gross
residual value, a ‘net’ residual value results. The question is then whether

this net residual value is sufficient in terms of development value relative
to the site in its current use.

Calculating what is likely to be the value of a site given a specific planning
permission, is only one factor in deciding what is viable.

4.2 Land owner considerations

A site is extremely unlikely to proceed where the costs of a proposed
scheme exceed the revenue. But simply having a positive residual value

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